There is a computer at my school with an 8500GT running Linux, and the 2D performance on it is great. Can you give the 185.18.04 driver in my PPA repository a shot? It might make a difference, because I never tried that particular card with the 180.xx series.

I tried the 185 driver, but there was no noticeable improvement.

Another issue I noticed is that scrolling is sometimes slow initially, then it seems to get cached and is fast. This sometimes happens when dragging large photos in gqview, for example. I've never seen this with any other video card.

Anyway, it's not worth wasting time over. I've switched to an old Radeon X300 and 2D is back to normal, and there's no messing with binary drivers. 3D sucks of course, but I don't need it. I'll probably pick up a cheap Radeon 4350 in anticipation of it being well supported in the future.